Cloud is not a new thing in the technology and software world. Cloud and Saas technology allowed to build remarkable world brands, yet cloud tech still keeps raising questions about adoption and acceptance in engineering and manufacturing software. The past decade demonstrated how dominant CAD and PLM vendors moved from rejecting the idea of cloud technology and applications into learning and adoption. However, when it comes to the mature PLM world, cloud and SaaS is still trending with a big question mark, a high level of concern, and sometimes even ignorance in the understanding of basic tech aspects. Earlier this week, I published an article – How SaaS will change the PLM architect job forever and got a lot of interesting comments and feedback online and offline.
I wanted to talk to PLM practitioners and the community, which is heavily involved and committed to traditional PLM implementation. I wonder to learn how the community is aligned and ready with the changes that are coming from dynamically developed SaaS PLM space. I’ve got a bunch of topics. I gathered them and today, I want to address these topics.
1- Cloud Architecture
Is there something special about cloud PLM architecture? What are all these magic words used by cloud and IT architects – SaaS, PaaS, Hybrid? Here is the thing – the software industry is moving to the cloud (or whatever another name we want to give it). The foundation of this process is the transition of computing resources, storage, and IT management tools. You can rarely come with examples of tools in data and process management that do something today outside of the “cloud” scope when it comes to a new software product development. So, the adoption of cloud architectures is not a question of why, but the question of when. Understanding that cloud architecture is the only viable architecture these days is the same thing as the adoption of technologies in all other places in our lives – we move away from files. we move towards mobile, connected processes, remote communication, e-commerce, and many other places. Nobody is really developing non-cloud on-premise applications these days. The applications can run differently sometimes and use different client technologies (browser, mobile, or even desktop), but all of them are connected. So, everything we know about technology and cloud architecture will be adopted… Company servers will disappear, files will disappear, applications will be managed in a different forms. It is just a matter of time.
2- Business Models
As a result of technological change, we will get an opportunity to introduce new business models. Why? Because we can now and it will make a lot of sense to businesses. It is like the introduction of CPC in advertising versus billboards 20 years ago. There are two key areas of business model transformation – (1) SaaS and subscriptions, (2) data transactions. The first is the one you most probably heard the most about and it is easy – companies are selling time-based services – subscriptions. It is growing as a dominant model. The second thing about data transactions requires some explanation in my view. The previous paradigm of PLM is around ownership of data, locking, and upselling applications to data. Many vendors can disagree, it is still the main model today. The growing change from the connected world is related to transactional models. Data is valuable as much as it can be used to sell services. This is how most advertising systems work and this is in my view is the future how business applications will work. The future of manufacturing services is very much dependent on the data related to the product and it will be the business driver of the future.
3- PLM implementations and customization
Services account for about 50% of revenue coming from PLM business. And this money coming from implementations and customization combined with consulting – technical and business. Existing PLM systems with their business model, weaknesses, and complexity are part of the current business. While large companies are always hard to transform, the introduction of new technologies is facing resistance because nobody likes changes. Cloud implementations, API, and related services are amazingly robust these days. But, the knowledge about these capabilities is hidden behind many myths and concerns. Most typical are – Saas is not flexible. hard to integrate and cannot customize. The tricky part of the answer is that SaaS cannot be customized in the old fashion way. But new ways are amazingly robust and can easily outperform the old ways. REST API and web services are amazing. The ability to monitor user experience and provide support is the next level. Machine learning and predictive analytics can provide a set of business features on-premise PLM will never have. There is a big gap in understanding of these technologies among PLM practitioners.
4- Business and Data
PLM is associated with large volumes of data (especially for CAD models) and complex integrations (MES/ERP/CRM). The idea that is still dominant across many PLM practitioners is that data is a problem with cloud apps. Well, it is true if the assumption that the data must travel all the time between desktop and cloud servers. Once, there is no need to do so, life is getting much easier. The data lives in the cloud servers and data centers. Data transfers and exchanges are optimized and not disturbing processes on the customer side.
5- Role of PLM architect
The role of the PLM architect is to align the solution capabilities and customer needs. PLM products are ultimately on the top list for the complexity rank in enterprise software. Multiplied with the high cost of projects, it created a very interesting business niche. To align the requirements of enterprise PLM projects with capabilities of PLM products and the politics of large vendors and corporations is a complex work. PLM architects are working with elite customers on projects with elite budget and attention. Will SaaS change the status quo? Of course, not. In my view, the role of the PLM architect will actually become even more important. The complexity of large corporations will remain the same. But, the new business and technology perspective will make the technology landscape even more complex and the role of the architect even harder. While the previous scope was limited to SQL servers and some networking, today it turns into global cloud computing, storage, networking, and architecture of communication between companies.
What is my conclusion?
The questions and comments I’ve got from people gave me indications about the huge knowledge gap among PLM architects and other PLM practitioners with regards to technology and specifically cloud and SaaS architectures. The confusion is about multiple topics – architecture, business models, customization, and many others. Cloud and SaaS is a big unknown for most PLM architects working on traditional PLM tech stack. As with every change in technology and business, this change is not easy for all participants – vendors, companies, consulting, PLM architects, and other players. And it sometimes turns into defensive reaction, politics, and rejections. I don’t see an alternative for cloud and SaaS. The question is not why, but when. What was a vision and future 5-10 years ago, today is a normal business for companies creating SaaS applications. As an architect, you either catch up and left behind. The pace of changes will only to speed up. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network platform that manages product data and connects manufacturers and their supply chain networks.